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Is a Fixed Rate Electric Plan Right for You? Factors to Consider

When you shop for an electricity plan, you can find plans with both fixed and variable rates. Fixed-rate plans keep your per kWh cost stable regardless of the market’s highs and lows.

These plans typically involve contracts that last several months to a couple of years. But is a fixed-rate electricity plan right for you?


A fixed-rate electricity plan is your best option if you enjoy price stability and predictability. With a fixed-rate plan, the price per kilowatt hour remains the same for the duration of your contract. This can help you budget your energy costs more accurately and reduce surprises.

Typically, the term length for fixed-rate plans is between three and 36 months. However, some providers like Pasadena electric company may also offer month-to-month options. While these plans are less common, they may be an option for customers who are on the move often and want to avoid committing to a long-term plan.

If you choose a variable-rate electricity plan, it will change based on market prices. If the price of natural gas or other fuels drops, your rates will also decrease. However, if market prices increase, your rates will also go up, resulting in the possibility of you paying more than necessary.

It’s important to weigh each rate type’s pros and cons before deciding which is right for you. It comes down to your budgeting needs, how much risk you’re comfortable taking, and whether you regularly keep up with the energy markets. Choosing the right rate plan will help you create more savings in the long run. 


A fixed-rate plan will lock you into a certain per-kilowatt-hour price for the duration of your contract. This is great for those who like to budget their energy costs ahead of time. It can also be a good choice if you live in an area prone to extreme weather conditions. A sudden spike in power rates could cause your monthly bills to skyrocket. With a fixed-rate plan, you can avoid these spikes and still enjoy your favorite comforts, such as running the air conditioner on a hot day.

However, it’s important to note that a fixed rate plan will not allow you to benefit from lower electricity prices if the market experiences a dip. This means you will not save money if electricity markets fall during months with mild temperatures. A variable rate plan is a better option for those who follow energy markets closely and know to adjust their usage when the market is low. Most energy companies offer fixed and variable-rate plans, so you can choose the one that best fits your needs. It’s important to read the fine print before you agree to a long-term fixed-rate plan, as these types of contracts often have early termination fees.

Early Termination Fees

It is important to note that several electricity providers may impose an early termination fee (ETF) if you cancel your contract before its end date. These fees can be fixed or calculated based on the remaining months in your contract.

With a fixed-rate electricity plan, your energy price per kilowatt-hour will stay the same for the length of your contract. This can help you budget and predict your monthly energy costs. It also gives you peace of mind, knowing that your energy prices will not rise unexpectedly, unlike with a variable-rate plan.

However, you will pay higher energy rates if market prices decline during your contract term. This is why it’s important to consider your current and future needs when choosing between a fixed-rate or variable-rate plan.


A fixed-rate electric plan which you could shop tx electricity prices is the best option if you’re looking for price stability. These plans will lock in a rate per kilowatt hour for your contract, meaning you can budget your energy costs without worrying about fluctuating rates.

However, if market prices drop while you’re on a fixed-rate contract, you won’t be able to benefit from the lower rates – and you’ll also be stuck paying your fixed-rate contract until it expires. That’s why it’s important to consider your current and future energy needs when choosing a fixed or variable-rate electricity plan.

On the other hand, if you live alone or in a small household and use low energy, you can save money by switching to a variable-rate plan instead. Time-of-use plans, based on when you consume your energy, incentivize customers to reduce their usage during peak hours when demand is highest. That’s good for both the environment and your wallet! Whether you’re on a variable or fixed-rate plan, remember that you can always check the type of rate you’re paying by examining your most recent energy bill. Look for an “energy charge,” “electric supply,” or “electric rate” section that will show you what type of plan you’re on. Ask your supplier or read your contract for more details if you need more clarification.


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